DAX 40 Descending Channel On The Daily Hi Traders,
Having a look a the DAX today on the daily and 4 hours.
I have highlighted the descending channel that we have been in since mid-June. Descending channels are a great pattern and can usually present a great setup with a high risk to reward as the targets for the channel entries are usually up where the channel began.
We can classify this as a channel as we have a minimum of two taps on either side and if we adjust slightly to cover the wicks then we can say we have three taps on either side. I have shown these taps on the chart with small arrows indicating where the rice has touched the top and bottom of the channel.
I have added a line that cuts through the channel In a horizontal fashion. This line indicated previous support flipped resistance and we can see that price has respected this line. It was supported and when it flipped to the resistance we had a nice short bounce off of it. We need to see a break above this resistance to confirm bullish action.
Looking at the MACD below, we have divergence across the histogram. As the price continued to make lower lows, the histogram was trending upwards which indicated to us that the sellers have been weakening. This is usually a good sign when looking at descending channels in any time frame because once we see this partial divergence we can start waiting patiently for a break of the channel top.
Let's move on to the volume. Notice how the volume has decreased dramatically since we began the descending channel. If we see a break above the channel top, we need to see accompanying strong bullish volume.
THE SETUP
Usually, the way I would wait for a setup is, that we need to see the price break above the channel top as this is descending resistance. Once we see this impulsive break, we need to see the price close above the channel top confirming that this channel is indeed broken. As I am a patient break and retest trader and as this is on the daily time frame, I would wait for the price to come back down and retest the channel top as support before triggering a long position and trading the DAX to the upside. Targets would be around the 13700 level. This is a psychological whole number that adds confluence to the target as well as it being the price where the descending channel began.
This would be a long-term swing trade as this could take time to play out. Until we see that break, there is no point in even looking for a retest or long position in this time frame.
Until then, let's keep watching and keep our eyes open.
Hope you all have a wonderful Thursday.
See you all on the next one.
The Vortex Trader.
Dax40long
GER40 Buy the trend line support.GER40 - Intraday - We look to Buy at 14421 (stop at 14344)
Daily signals are mildly bullish.
Our short term bias remains positive.
50 4hour EMA is at 14430.
We look to buy dips.
Trend line support is located at 14410.
Our profit targets will be 14608 and 14648
Resistance: 14600 / 14640 / 14700
Support: 14500 / 14400 / 14300
GER40 To buy a dip.GER40 - Intraday - We look to Buy at 14401 (stop at 14319)
Daily signals are mildly bullish.
Our short term bias remains positive.
50 4hour EMA is at 14383.
We look to buy dips.
Price action has formed a bullish ascending triangle
formation.
Our profit targets will be 14598 and 14638
Resistance: 14600 / 14640 / 14700
Support: 14500 / 14400 / 14300
GER40 Buy at 50 EMA.GER40 - Intraday - We look to Buy at 14276 (stop at 14199
)
50 4hour EMA is at 14272.
Our short term bias remains positive.
We look for a temporary move lower.
Previous resistance at 14300 now becomes support.
14276 has been pivotal.
Our profit targets will be 14459 and 14499
Resistance: 14500 / 14600 / 14700
Support: 14400 / 14300 / 14200
GER40 Buy at 20 EMA.GER40 - Intraday - We look to Buy at 14411 (stop at 14339)
Our short term bias remains positive.
We look to buy dips.
20 4hour EMA is at 14411.
A lower correction is expected.
Our profit targets will be 14588 and 14628
Resistance: 14600 / 14700 / 14800
Support: 14500 / 14400 / 14300
GER40 Buy a break setup.GER40 - Intraday - We look to Buy a break of 14316 (stop at 14248)
14314 has been pivotal.
Short term momentum is bullish.
There is no clear indication that the upward move is coming to an end.
Short term bias is bullish.
Our profit targets will be 14488 and 14528
Resistance: 14300 / 14400 / 14500
Support: 14200 / 14100 / 14000
GER40 Buy a break setup.GER40 - Intraday - We look to Buy a break of 14251 (stop at 14177)
Short term momentum is bullish.
A break of yesterdays high would confirm bullish momentum.
20 1day EMA is at 14224.
Morning dips were bought into in front of yesterday's support level (14000) and follow through bullish momentum resulted in all the initial down move being overturned.
Our profit targets will be 14444 and 14484
Resistance: 14250 / 14320 / 14400
Support: 14150 / 14080 / 14030
DAX - Long as projectedAs projected on the 31th Jan DAX is hitting our first target. It's time to adjust your stop-loss if you have not already. This upper line of the triangle can be tested several times today and if it holds we are heading for the second target which will be around 15950 points. otherwise, we can expect the price to fall to the EMA (9).
Stop-loss can be adjusted to the EMA (9) line or slightly below.
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🎯 About my posts: They are kept self-explanatory in order to avoid overcomplicating and confusion. Mostly price signals and trend analysis combined with chart patterns.
Disclaimer: This is not an investment advice
DAX - Alert for potential longRSI - SMA is close to signaling a "buy". If the price stays the same or higher by end of the day. If this happens target is the upper triangle line (blue line) and the second target will be around 15950 points.
What do we don't want to see for confirming our "long strategy": A closing below the SMA (9)
If you like this analysis - thumbs up!
________
🚀 Follow for daily posts
🎯 About my posts: They are kept self-explanatory in order to avoid overcomplicating and confusion. Mostly price signals and trend analysis combined with chart patterns.
Disclaimer: This is not an investment advice
GER40 Buy the oversold correction.GER40 - Intraday - We look to Buy a break of 15276 (stop at 15204)
We are trading at oversold extremes.
A break of 15270 is needed to confirm follow through bullish momentum.
20 4hour EMA is at 15470.
We look for a temporary move higher.
A lower correction is expected.
Our profit targets will be 15477 and 15517
Resistance: 15270 / 15400 / 15500
Support: 15100 / 15050 / 15000
GER40 Buy at previous resistance.GER40 - Intraday - We look to Buy at 15451 (stop at 15381)
Prices have reacted from 15057.
Bespoke support is located at 15450.
15426 has been pivotal.
Short term momentum is bullish.
Our profit targets will be 15649 and 15669
Resistance: 15500 / 15550 / 15600
Support: 15450 / 15400 / 15350
DAX: Primary Push?The DAX has excellently recovered from its low and is celebrating it with some great runs. However, within the blue box, where the index is currently located at, there is a high chance that this current surge is only short-lived. With a chance of 40%, the course might drop all the way down to the pink area.
Don't be too fast!